India tops the list of global remittances

India has topped the Global Remittance list published by the World Bank in 2014. Having received $70 billion from Indian migrants from around the world in 2013, India topped the list leaving behind its largest neighbour China which received $64 billion in the same year.

Besides India, countries like China, Mexico, the Philippines and Nigeria figure in the top five positions in terms of receiving remittances, according to a report that was published on April 14^.

“Total remittances in 2014 reached USD 583 billion. This is more than double the official development assistance (ODA) in the world. India received USD 70 billion, China USD 64 billion, the Philippines USD 28 billion. With new thinking these mega flows can be leveraged to finance development and infrastructure projects,” said Kaushik Basu, Chief Economist and Senior Vice President, World Bank. “Total remittances in 2014 reached USD 583 billion. This is more than double the official development assistance (ODA) in the world. India received USD 70 billion, China USD 64 billion, the Philippines USD 28 billion. With new thinking these mega flows can be leveraged to finance development and infrastructure projects,” said Mr Basu.

The increase in remittances flowing into India was only less than a million from 69.97 billion in 2013. Accounting for about 3.7 per cent of the country’s nearly $2 trillion GDP, inflows in the form of remittances act a cushion to absorb any shock to India’s economy.

The World Bank said that the remittances can also facilitate access the international capital markets by “improving sovereign ratings and debt sustainability of recipient countries.” The Bank also stressed that the future inflows can also be used as “collateral to facilitate international borrowings” by banks in developing countries”.

“Israel and India have shown how macro liquidity crises can be managed by tapping into the wealth of diaspora communities. Mexican migrants have boosted the construction sector. Tajikistan manages to nearly double its consumption by using remittance money. Migrants and remittances are clearly major players in today’s global economy,” Mr Basu said.

“As to long-term financing needs for the Post-2015 Development Goals, I would love to see a bullet train system in India, an international airport in Nigeria, another Suez Canal in Egypt, a hydro-project in Pakistan, a community development program in the Philippines, all financed by mobilising the power of remittances and diaspora savings,” said Dilip Ratha, Lead Economist, Migration and Remittances, at the World Bank’s Development Prospects Group and Head of the Global Knowledge Partnership on Migration and Development (KNOMAD).

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